Believes chemical tanker market will improve in Q2; expects 'stable' results for terminal business throughout 2018.

Odfjell's oil/chemical tanker, Bow Clipper. Image credit: Odfjell

Updated on 10 May 2018 10:08 GMT

Shipping company and terminal operator Odfjell reports that the average bunker price paid by its chemical tankers in the first quarter (Q1) of 2018 was up compared to the corresponding period last year.

The Norwegian firm says the mean fuel cost for its chemical tanker fleet was $406 per tonne (including the effect from bunker adjustment clauses) in Q1, which was an increase of $21, or 5.5 percent, year-on-year (YoY). In a quarter-on-quarter (QoQ) comparison, the rise was $25, or 6.6 percent.

Odfjell posted Q1 gross bunker costs of $41.4 million, which was a YoY increase of $3.8m, or 10.1 percent.

On the issue of risk, Odfjell said bunker clauses in contracts of affreightment (COAs) cover 60-64 percent of its marine fuel exposure and that it does not have any remaining financial hedging for bunkers.

Key financial results

In its overall results, Odfjell posted a Q1 net loss of $12.1m, compared to the net profit of $1.5m and $104.3m recorded in Q1 2017 and Q4 2017 respectively.

Commenting on the results, Odfjell CEO Kristian Morch said: "The chemical tanker market remained challenging during the quarter, but we continue to outperform the general market."

Odfjell said: "The improvement seen in the chemical tanker markets towards the end of the fourth quarter continued into the new year, until Chinese New Year and other festivities reduced activity and put pressure on rates. Market improvement failed to materialise in the latter half of the quarter."
"We reiterate our view that the markets for chemical tankers will be turning a corner in 2018 and we expect a gradual pick-up from 2H 2018 with demand outgrowing new additions to the fleet."

The company added: "We expect Odfjell Terminals results to be stable throughout 2018."